Advertisement
U.S. markets close in 16 minutes
  • S&P 500

    5,259.90
    +11.41 (+0.22%)
     
  • Dow 30

    39,831.94
    +71.86 (+0.18%)
     
  • Nasdaq

    16,392.67
    -6.85 (-0.04%)
     
  • Russell 2000

    2,122.76
    +8.42 (+0.40%)
     
  • Crude Oil

    83.08
    +1.73 (+2.13%)
     
  • Gold

    2,240.40
    +27.70 (+1.25%)
     
  • Silver

    24.97
    +0.21 (+0.86%)
     
  • EUR/USD

    1.0791
    -0.0039 (-0.36%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2622
    -0.0016 (-0.13%)
     
  • USD/JPY

    151.4020
    +0.1560 (+0.10%)
     
  • Bitcoin USD

    70,872.94
    +2,376.66 (+3.47%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Netflix debuts in Japan as threats grow at home

TOKYO, JAPAN - SEPTEMBER 02: Japanese comedian Ryota Yamazato and Reed Hastings, founder and CEO of Netflix Inc. attend the launch event for Netflix service in Japan at SoftBank Ginza store on September 2, 2015 in Tokyo, Japan. Netflix Inc. partnered with Japan's SoftBank Group Corp. for the Japan launch of its video-streaming service on September 2, 2015. (Photo by Ken Ishii/Getty Images)

Across the Pacific Ocean, Netflix (NFLX) is planting its flag in new territory. The streaming video service is launching in Japan today, rolling out a host of local-language programming and other content in a country with 127 million people. It’s the company’s first foray into Asia.

While Netflix is celebrating a company milestone with new international expansion, it is under attack in its home country. Hulu just announced it will add an $11.99 commercial free offering for its streaming customers. Amazon (AMZN) is now offering Prime members the ability to download streaming content to view later - a big competitive advantage. And let’s not forget Apple (AAPL), which reportedly is in talks to create original programming and has its big fall event next week where many speculate a new TV product will debut.

Get the Latest Market Data and News with the Yahoo Finance App

For Netflix, however, challenges to its business is nothing new. “That's what it's done for its entire existence, navigate threats,” Yahoo Finance’s Rick Newman notes in the attached video. “Remember when Blockbuster was a huge threat to Netflix? Blockbuster went out of business.”

For Netflix, Newman believes the company’s strategy of not being a viewer’s one-stop shop for all things video streaming is the right choice. “They're being pretty crafty about what they're trying to do,” he says, pointing out that Netflix has “gotten out of trying to offer every first run movie because they don't want to pay for it, they're basically saying ‘we want to be one of your entertainment options, perhaps your first entertainment choice, but we know you're going to have other choices.’”

In Newman’s view, we’re living in an era of fragmentation in the entertainment marketplace. Netflix’s decision to focus on content like TV programming and original content is smart, and the company seems well positioned to succeed in the changing landscape. Investors this year have agreed with that view, with shares more than doubling in value so far in 2015.

Its move into Asia could be the next catalyst for growth, but Newman cautions the company needs to be careful with its growth plans. Although Japan is a technologically advanced nation with high broadband penetration, it is surprising to note that the pay TV market is very small, and in fact, many Japanese still rent DVDs from local stores and kiosks. The risk here, Newman notes, is for companies like Netflix to “try to do what they do in the United States in every other country in the world, the same way they do it here, and it doesn't work,” he says. “You have to account for cultural differences.”

More from Yahoo Finance

Bears on parade: Wall Street market downgrades just beginning
Why Tesla wants Obama’s help in China
Why ‘Flash Boys’ are here to stay

Advertisement